DESCRIPTION (provided by investigator): The purpose of this research is to develop and assess amodel of mental illness and work disability, with a specific focus on identifying the types of mental disorders associated with poor work outcomes, and the extent to which persons with mental disorders are subject to discrimination in the labor market. Previous research shows that discrimination contributes to the low wages and employment rates of persons with disabilities, and that the extent of discrimination is weakly correlated with the intensity of prejudice against different types of impairments. Persons with mental disorders may be subject to intense prejudice, but there are no studies of labor market discrimination specifically focused on mental illness. In part, this is because the data have not been available to support such a study. The information is now available on the MEPS and the NHIS Disability Survey, and the two data sets can be linked. The proposed project will use this rich data source to provide the first rigorous economic analysis of the impactof mental disorders on outcomes in the labor market. The specific goals of the project are: (1) To compare the relative wages and employment rates of persons with serious mental disorders to persons with physical impairments and non-disabled persons; and to estimate the extent to which the low wages of persons with mental disorders can be attributed to labor market discrimination. (2) To compare the health care and work loss costs of persons with different types of mental disorders and analyze the extent to which expectations regarding expenditures may explain observed wage and employment differentials. (3)To identify job characteristics that enable persons with mental disorders to participate in the labor market (e.g., occupation, health insurance coverage, part-time employment). (4) To analyze the extent to which self-reports of job-related discrimination coincide with measures of discriminatory wage and employment differentials across different types of mental disorders. The proposed project is timely because recent advances in medications for serious mental disorders now enable many persons with these illnesses to participate in the labor market. Yet discrimination may still prevent them from achieving their full potential.